How to use this loan calculator
You only need three numbers to get an answer: how much you are borrowing, the interest rate and how long you will take to repay it. The results update as you type, so drag the sliders to see how a different amount, rate or term changes the picture.
- Loan amount: the amount you are borrowing, also called the principal. Leave out any deposit you are paying in cash.
- Interest rate: the yearly rate your lender quotes. If you have only been given an APR, enter that instead for a close estimate.
- Loan term: how long you have to repay. Use the Term in switch to enter it in months for short loans, such as 18 months.
- Repayment frequency: monthly, fortnightly (every two weeks) or weekly. The repayment shown matches the frequency you pick.
- More options: set the first repayment month to put real dates in the schedule, and add an extra repayment to see how much interest and time it saves.
Below the headline repayment you will find the total interest, the total you repay, your payoff date and interest as a percentage of what you borrowed. The chart splits each year's repayments into principal and interest. The schedule lists every repayment when there are 120 or fewer, and summarizes longer loans by year.
The loan repayment formula
M = P × r ÷ (1 − (1 + r)−n) M = repayment · P = loan amount · r = yearly rate ÷ repayments per year · n = total number of repayments
This is the standard formula for an amortizing loan, where every repayment is the same size and the last one brings the balance to exactly zero. Each period, the lender charges interest on the balance you still owe. Whatever is left of your repayment then reduces that balance. Because the balance shrinks, the interest part of each repayment shrinks too, and more of your money goes to principal as the loan goes on.
Worked example
You borrow $25,000 at 7.5% over 5 years, repaid monthly. The rate per month is 0.075 ÷ 12 = 0.625%, and there are 5 × 12 = 60 repayments. Putting those into the formula gives a repayment of $500.95 a month.
In month one, interest is $25,000 × 0.625% = $156.25, so $344.70 of your repayment reduces the balance to $24,655.30. By the final repayment the interest is just $3.11. Across all 60 repayments you pay $30,057, of which $5,057 is interest, or 20.2% of the amount borrowed.
Add an extra $50 to every repayment and the loan is cleared in 54 months instead of 60, saving about $564. An extra $100 clears it in 49 months and saves about $1,014.
What changes your repayment and total interest
The loan term
A longer term spreads the balance over more repayments, so each one is smaller. But you pay interest for longer, and the total climbs quickly. Here is the same $25,000 loan at 7.5%:
| Term | Monthly repayment | Total interest |
|---|---|---|
| 3 years | $777.66 | $2,996 |
| 5 years | $500.95 | $5,057 |
| 7 years | $383.46 | $7,210 |
| 10 years | $296.75 | $10,611 |
Stretching from 5 to 7 years cuts the repayment by about $117 a month but adds $2,153 of interest. At 10 years you pay more than three times the interest of the 3-year loan.
The interest rate
On the 5-year example, moving from 7.5% to 10% adds about $30 a month and $1,814 of interest. At 15% the interest is $10,685, slightly more than double the 7.5% figure. Because the rate hits every repayment, a better credit score or a few phone calls to other lenders can be worth more than any other change. The loan comparison calculator puts two offers side by side, fees included.
How often you repay
Weekly repayments on the example loan are $115.38 and save about $59 of interest compared with monthly. That is a small gain. The well-known trick is different: pay half the monthly amount every fortnight, $250.47 in this case. There are 26 fortnights in a year, so you pay about $6,512 a year instead of $6,011, the same as one extra monthly repayment. The loan is cleared in about four and a half years and you save roughly $530.
Extra repayments
Every dollar you pay above the scheduled amount goes straight to principal, so it stops attracting interest from that day on. Before you rely on this, check that your loan allows extra repayments without a fee. Some fixed-rate loans cap them or charge a break cost.
What this calculator does not show
- Fees. An origination or establishment fee, or a monthly account fee, raises the real cost above the interest rate. The personal loan calculator turns those fees into an effective APR so you can compare offers fairly.
- Variable rates. The calculator assumes one rate for the whole term. For a variable loan, try the rate 1 to 3 percentage points higher to check the repayment would still be comfortable.
- Balloon or residual payments. Some car loans leave a lump sum to pay at the end. The car loan calculator handles balloons, trade-ins and sales tax.
- Mortgage costs. For a home loan with property tax, insurance and PMI, use the mortgage calculator.
Rule of thumb: choose the shortest term whose repayment fits comfortably in your budget, then add extra repayments when you can. Before you apply, check your total debt repayments against your income with the debt-to-income calculator, since lenders look at that number closely.
Loan terms in different countries
The maths is the same everywhere, and you can switch currency at the top of the page. The vocabulary changes:
| Concept | United States | Australia / NZ | United Kingdom | India |
|---|---|---|---|---|
| Rate including fees | APR | Comparison rate | Representative APR | APR |
| The repayment | Monthly payment | Repayment | Monthly repayment | EMI (equated monthly installment) |
| Common frequencies | Monthly | Weekly, fortnightly, monthly | Monthly | Monthly |
| Repayment table | Amortization schedule | Repayment schedule | Repayment schedule | EMI schedule |
Frequently asked questions
How do I calculate a loan repayment by hand?
What is an amortization schedule?
Does paying weekly or fortnightly save money?
Why does so much of my first repayment go to interest?
What is the difference between the interest rate and the APR?
Can I use this for a car loan or a mortgage?
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.